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Introduction to Eximbank and IFC's proposed investment

B.C. Eximbank – Gruppo Veneto Banca S.A. ("Eximbank" or the "Bank") was established in the Republic of Moldova in 1994. On May 15, 2006 the Bank became a member of Veneto Banca Group following its acquisition by Veneto Banca s.c.p.a. (Italy).

Today the Bank services its client through a network of 20 branches and 18 representative offices located throughout the Republic of Moldova.

The proposed IFC investment is consisting of a senior loan of up to EUR20 million with a proposed maturity of up to 5 years, for further on-lending to SMEs, to Eximbank.

In the given market environment, IFC is supporting Eximbank with long term financing, sustaining Bank’s efforts in offering high quality financial services to SME sector, which has a high growth potential.

Project Sponsor and Major Shareholders

The joint stock company “EXIMBANK-Gruppo Veneto Banca” was created in April 1994 from the Moldovan branch of the former Bank for Foreign Economic Affairs of the USSR.

In 2006, Italy’s Gruppo Veneto Banca (“GVB”) acquired the bank.

Veneto Banca Group is ranked among the top 10 Italian banks. The parent Company, Veneto Banca Holding is incorporated as Cooperative Bank Limited.

Veneto Banca Group has a reputation of a solid and active banking group with:

  • Strong link to local environment
  • Dynamic and capable management team

Its history dates back to 1877, to the establishment of Banca Popolare di Montebelluna.

The Group’s overseas holdings include:

  • Banca Italoromena (Romania), acquired in 2001
  • Veneto Banka Croatia, acquired in 2006
  • Veneto Banka Albania, with acquisition completed in 2009
  • Eximbank Moldova, acquired in 2006

By supporting Eximbank, IFC would increase access to finance for Moldavian enterprises and support economic activity and job creation.

IFC investment would help banking sector sustain trust, during a difficult period.

Rationale for IFC's investment

Banks and companies are experiencing difficulty in sourcing long term funding, which is severely curtailing economic growth.

Through this Project IFC would provide funding with maturities which are not readily available on the market.

For this Category FI project, IFC''s appraisal will focus on Eximbank''s capacity, policy, and procedures to manage social and environmental risks associated with lending activities in SME.

IFC's investment would:

  • Provide long-term financing not readily available in current market environment
  • Support Eximbank and banking sector in maintaining trust during difficult period
  • Increase access to finance for Moldovan enterprises, supporting economic activity and job creation

Specifically, IFC's investment will:

  • Sustain Eximbank's efforts in offering high quality financial services to SME sector, which has a high growth potential
  • Support economic activity and job creation by increasing access to finance for Moldavian enterprises
  • Help banking sector sustain trust, during a difficult period of sourcing long term funding

The proposed IFC investment consists of:

  • A senior loan of up to EUR20 million
  • Proposed maturity of up to 5 years
  • For further on-lending to SMEs

In the given market environment, IFC is supporting Eximbank with this long term financing.

IFC's Appraisal and Recommendations

For this Category FI project, IFC''s appraisal will focus on Eximbank''s capacity, policy, and procedures to manage social and environmental risks associated with lending activities in SME.

If necessary, IFC will provide recommendations to enhance existing procedures and formalize procedures into a Social and Environmental Management System (SEMS) to ensure that lending activities are screened against the IFC Exclusion List, relevant National Laws and/or IFC Performance Standards.

IFC will also review Eximbank''s human resources policy to evaluate compliance with the IFC Performance Standard 2 on Labor and Working Conditions.

The key areas IFC will appraise include:

  • Eximbank's capacity to manage social and environmental risks
  • Eximbank's policies and procedures for managing these risks
  • Screening lending activities against:
    • IFC Exclusion List
    • Relevant National Laws
    • IFC Performance Standards
  • Eximbank's human resources policy compliance with IFC Performance Standard 2

IFC's recommendations may include:

  • Enhancing existing procedures
  • Formalizing procedures into a Social and Environmental Management System (SEMS)
  • Modifications to human resources policy to comply with IFC standards

This appraisal and recommendations will aim to ensure:

  • Responsible lending by Eximbank
  • Management of social and environmental risks
  • Compliance with IFC standards and requirements

Overall, IFC's investment combined with appraisal and guidance will:

  • Increase availability of long-term financing
  • Support SME lending by Eximbank
  • Promote sustainable and responsible lending practices
  • Assist Eximbank in managing social and environmental risks
  • Enable economic activity, job creation and growth in Moldova

Conclusion

In conclusion, IFC's proposed €20 million senior loan to Eximbank in Moldova will provide much-needed long-term financing to support lending to SMEs. This will assist Eximbank and the banking sector during a difficult period, while promoting economic growth and job creation.

IFC will appraise Eximbank's capacity to manage social and environmental risks associated with SME lending. Recommendations will be provided to formalize and enhance risk management policies and procedures. Eximbank's HR policies will also be evaluated for compliance with IFC standards.

This investment and guidance will strengthen Eximbank's SME lending and risk management practices in line with IFC requirements. Overall, it will improve access to finance for Moldovan enterprises, enabling business activity, and supporting sustainable economic development in the country.

With IFC's financing and support, Eximbank can continue serving SME clients and play a vital role in Moldova's economic growth. This concludes the key points on IFC's proposed investment in and appraisal of Eximbank.

FAQs

#$## What is IFC's proposed investment in Eximbank?

IFC is proposing a €20 million senior loan to Eximbank in Moldova, with a 5 year maturity. This will provide long-term financing for on-lending to SMEs in the country.

Why is IFC investing in Eximbank?

The investment will increase access to finance for Moldovan enterprises, supporting economic activity and job creation. It will help Eximbank and the banking sector sustain trust during a difficult period.

What will IFC's appraisal of Eximbank involve?

IFC will appraise Eximbank's capacity, policies and procedures to manage social and environmental risks of SME lending. Recommendations will be provided to formalize a Social and Environmental Management System. HR policies will also be evaluated for IFC compliance.

How will this investment impact Moldova?

The financing and support will strengthen Eximbank's SME lending and risk management practices. This will improve access to finance for Moldovan businesses, enabling economic activity, job creation and growth.

How does this fit into IFC's larger objectives?

The investment aligns with IFC's goals of supporting private sector development, increasing access to finance, and promoting environmentally and socially responsible business practices in emerging markets.

Refrences

0. https://eximbank.md/

1. https://eximbank.md/contacts

2. https://eximbank.md/deposit-types

3. https://eximbank.md/exchange

5. https://en.wikipedia.org/wiki/Exim_Bank_(Bangladesh)

6. https://www.eximbankindia.in/board-of-directors

7. https://euroeximbank.com/about-eeb

8. https://en.wikipedia.org/wiki/Exim_Bank_(Uganda)

9. https://online.eximbank.com/

10. https://disclosures.ifc.org/project-detail/SPI/28856/eximbank-moldova

11. https://www.crunchbase.com/organization/eximbank-moldova

12. https://www.crunchbase.com/organization/eximbank-moldova/org_similarity_overview

13. https://md.linkedin.com/in/alexandru-gherman-021919186

14. https://wise.com/gb/swift-codes/EXMMMD22XXX

https://www.youtube.com/watch?v=qGjbGnzcVhg

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